Exchange is the basis of marketing, with both parties to the exchange receiving something of value.

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1 Marketing Midterm Study Guide Chapter 1 Notes: Many people perceive marketing to be just advertising and personal selling, but it involves much more, including efforts by individuals and organizations to satisfy customer needs and wants, create value, and make exchanges. Preparation of financial statements is not part of marketing, although concerns about brands definitely are. Marketing decisions focus on the four Ps of the marketing mix: price, product, place, and promotion. Manufacturing processes are not the responsibility of marketing. Exchange is the basis of marketing, with both parties to the exchange receiving something of value. Marketing decisions focus on the four Ps of the marketing mix, which are the marketing activities controlled by the firm or organization. In addition to marketing goods, marketers also work with SERVICE, which offer customers intangible benefits, are produced by people or machines, and cannot be separated from the producer. Goods, services, and ideas can be marketed. Marketing services is an essential part of marketing. Services marketing are based on the same fundamentals as the marketing of goods but extend these ideas. Promotional messages are designed to accomplish one or more of the three promotional goals; informing customers, persuading customers to take action, or reminding customers about a marketer's product or service. Employment Marketing is used to find the best workers. Forward looking firms recognize the power of marketing and are establishing marketing approaches to find key approaches to meet their needs. Some firms like Nike and Mars, Inc., the maker of M&Ms, involve customers directly in the design of products and services to create additional value and strengthen the relationship between the customer and the firm. This practice is known as: value cocreation! Customizing orders is a powerful way to address the individual needs of customers. Customers seek benefits and will consider trade offs among them, while also considering costs. In value based marketing, the marketer must: meeting as many needs as possible while also keeping costs down. Customer relationship management is a philosophy that leads to a set of strategies, which often include programs and systems designed to build loyalty among customers. Expanding globally will lead to marketers job to understand their new customers. Since marketers are the "eyes and ears" of an organization, they are in the best position to help organizations understand customers. Chapter 2 Notes: A sustainable competitive advantage is something a firm can persistently do better than its competitors. Supply chain efficiency, brand name, customer satisfaction, and patented technology are all potential sources of sustainable competitive advantages. Customer, locational, product and operational excellence are all ways a firm can create value and can lead to sustainable competitive advantages Product excellence is one of the overarching strategies, and a firm may use the product itself, branding, and positioning to create an advantage difficult for a competitor to copy. A strategic marketing plan usually begins with a situation audit. It also identifies strategic opportunities and potential threats. It includes an evaluation of alternatives, a set of objectives, action plans, and appropriate pro forma financial statements.

2 The first step in the strategic marketing planning process is to identify the business a firm is in and to identify what is needed to accomplish its goals and objectives. The business mission should guide all areas of the firm in addition to the marketing area SWOT part of the audit. In a situation analysis a firm will examine the positives and negatives in its internal operations strengths and weaknesses. It will also examine the positives and negatives in the external environment opportunities and threats. No firm has sufficient resources to create value for all consumers. Marketers engage in target marketing to focus their firm's efforts for those segments of the marketplace that are most attractive. In the implementation phase of the strategic marketing planning process, marketers execute the marketing mix including pricing, product, promotion, and place decisions. The idea of value based pricing requires firms to charge a price that captures the value customers perceive they are receiving, which can be difficult to determine. In value based pricing, firms first determine the perceived value of their product from the customer's point of view and then price the product accordingly. She will use a series of Metrics, which are measuring systems that quantify a trend, dynamic, or characteristic. Metrics are used to explain why things happen and predict the future. They make it possible to compare efforts across regions, product lines, time and more. Effective metrics should be determined as part of the planning process, not an afterthought. The four major growth strategies available to marketers include market penetration, market development, diversification, and product development. In diversification the firm introduces a new product to a new market segment. Product development is when the firm introduces a new product to a current market segment. SWOT ANALYSIS: SWOT stands for strengths, weaknesses, opportunities and threats. A SWOT analysis occurs during the second step in the strategic planning process, the situation analysis. By analyzing what the firm is good at (its strengths), where it could improve (its weaknesses), where in the marketplace it might excel (its opportunities), and what is happening in the marketplace that could harm the firm (its threats), managers can assess their firm s situation accurately and plan its strategy accordingly. Internal is dealt with the strengths and weaknesses and external is the opportunities and threats. Chapter 4 Notes: By paying close attention to customer needs and continuously monitoring the environment in which it operates, marketers can identify potential opportunities. A firm's macroenvironment includes external factors, which the marketer cannot control The mission is the center of all marketing efforts. Competitors are an aspect of the immediate environment. Examples of macroenvironmental factors are the economic situation, changes in laws and regulations, demographics, and culture. Culture is the term used for a collection of shared values and beliefs. Compared to other groups, members of the generation x generational cohort are more likely to marry and buy homes later, are more cynical, are shopping savvy and are relatively less interested in luxury brands. While political candidates may practice elements of marketing, some key trends facing for profit and not for profit marketers alike are green marketing, marketing to children, privacy concerns and the impact of a time poor society.

3 Stock exchanges have their own rules and regulations, but they do not regulate firms the way governments do. Major factors that must be considered by marketers in examining the economic situation include all of the following such as inflation rates, foreign currency fluctuations, and interest rates. Income is not because it is more appropriately considered as a demographic factor. Chapter 5 Notes: Marketing focuses on creating value for customers. The more marketers understand how consumers make decisions, the better they can adapt their marketing strategies to meet the needs and wants of consumers. The consumer decision process model helps marketers to assess how consumers make purchase decisions. The consumer decision process begins when: customers recognize that they have an unsatisfied need. A consumer will examine his or her own memory and product knowledge first. Next, the consumer will conduct an external search to fill in personal memory gaps. Basically, internal and external searches for information. Marketers would like to be in the consumer's retrieval set for a purchase decision, but even more, they would like to be in the consumer's evoked set. A consumer's retrieval set is the group of brands or products a consumer can remember. A consumer's evoked set includes the brands or stores a consumer would consider when making a purchase decision. Market researchers use "top of the mind" surveys to define consumers' evoked sets for different categories of products or brands. Consumers use a noncompensatory decision when they choose a product or service on the basis of one or a subset of characteristics regardless of the values of the other attributes, such as having a girlfriend is the reason why you stay local for college. Marketers are particularly interested in post purchase behavior because it entails actual rather than potential customers. Dissatisfied customers often want to tell others about their experiences. Today, the Internet is a powerful tool for expressing and distributing opinions. Perception influences our acquisition and consumption of goods and services because it assigns meaning to things such as color, symbols, taste, and packaging. Consumer purchases may be affected by perceived or actual lifestyles, which refer to the way consumers, spend their time and money. Consumer Decision Rules are the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives Two forms of these rules are compensatory and non compensatory. A compensatory decision rule assumes that the consumer, when evaluating alternatives, trades off one characteristic against another, such that good characteristics compensate for bad characteristics. Sometimes, however, consumers us a noncompensatory decision rule, in which they choose a product or service on the basis of a subset of it characteristics, regardless of the values of its other attributes. Chapter 8 Notes: While the sequence for the Segmentation, Targeting and Position Process may be altered given opportunities, the full sequence is to establish the strategy or objectives, describe the segments, evaluate segment attractiveness, select a target market and identify and develop a positioning strategy. In addition to loyalty, benefits, psychographic and geodemographic segmentation, companies often use demographic and geographic segmentation. They don t use sociological segmentation. Marketers like Benetton want their ads to appeal to one's self concept, suggesting to consumers "I'm like them, so I should buy their products."

4 Geodemographic segmentation uses both location (geography: New York City) and demographics (age: over 50) to segment target markets. Research has shown that it is usually much more expensive to find new customers than to keep existing customers. Loyalty segmentation focuses on identifying the firm's most profitable customers and investing in retention and loyalty initiatives to retain them. People use loyalty segmentation because finding new customers is costly. Each segmentation method has advantages and disadvantages, giving the marketer a great deal of choice. For even greater flexibility, marketers can: use multiple segmentation methods. After identifying potential market segments, marketers ask and address questions such as "Is the segment substantial?" (i.e., are there enough people to potentially sell to?) and "Will the segment be responsive?" (i.e., are segment members likely to respond to the firm's marketing strategy). Whether or not the potential segment is profitable is another obvious concern. Whether or not the segment is reachable (can the marketer communicate with and deliver their goods to that segment?) is also critical to successful marketing. The potential profitability of segment depends on many factors including fixed costs, segment size, segment adoption percentage, and profit margin percentage. No marketer has sufficient resources to create value for all consumers. The essence of target marketing is matching the firm's competency with a market segment's attractiveness. Firms should establish the target strategy as the first step. Mass marketing, differentiated segmentation, concentrated segmentation, and micromarketing are the choices. Once segmentation and targeting have been completed, the marketer turns to positioning, often using a perceptual map to display graphically the customers' perceptions of the product and of its competitors' products. Positioning involves five steps: determining consumers' perceptions and evaluations, identifying competitors' positions, determining consumers' preferences, selecting the position, and monitoring the positioning strategy. Perceptual maps can be useful in evaluating a product's position compared to competitors and to consumers' ideal points. Positioning refers to how consumers think about a product, service, or brand in the market relative to competitors offerings. When developing a positioning strategy, companies go through five important stages: determining consumer s perceptions and evaluations of the product or service in relation to competitors ; identifying competitors positions determining consumer preferences; selecting the position; monitoring the positioning strategy. This data can be plotted on a position map to illustrate the market situation. Chapter 9 Notes: Marketing research is the systematic design, collection, analysis, and interpretation of data to assist with marketing management decision making. Data mining uses a variety of statistical analysis tools to uncover previously unknown patterns in data or relationships among data. Consumers are more anxious about a lot. Market research often involves gathering detailed information about consumers. With today's information technology, consumers are concerned about privacy in many different forms. This directly affects market researchers' attempts to directly survey individuals. The AMA guidelines for marketing research include all of the following such as prohibiting selling under the guise of conducting research, supporting research integrity, encouraging fair treatment of clients, supporting the duty of researchers to respect the consumer s privacy EXCEPT: supporting efforts to overcome consumers' concerns about privacy. One of the most important issues marketers must address before beginning a marketing research project is: whether or not senior management is willing to abide by the results.

5 Scanner data, U.S. Census data, internal company data and internet background research are all examples of secondary data. Secondary data are pieces of information that have already been collected from other sources and are usually readily available. The major advantage of primary data is that it can be tailored to meet the specific marketing research needs. Primary data is new data collected to address the specific research needs. Primary data can be tailored to meet the specific questions and problems to be addressed. Which of the following is true about conclusive research? It provides information to confirm preliminary insights, it is often quantitative in nature, it can enable the researcher to test his or her predictions, and it can be experimental. NOT TRUE: it includes observation, focus groups, and projective techniques. Jerry is designing an online survey questionnaire. When designing the questionnaire, Jerry should use language respondents that are familiar with it. Although it is sometimes hard to control who responds to online surveys, they have many advantages such as relatively high response rates, results that can be processed and received quickly, more honesty by respondents, and lower costs Once the data is collected, the researcher needs to create meaningful information, bearing in mind the purpose of the research. Data must be categorized, examined, collated and interpreted.

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